All Forum Posts by: Mike K.

Quote from @Bob Stevens:

Quote from @Mike K.:

After looking at the opportunities available in RE investing and analyzing the risks and rewards I decided that there are better options available to build wealth.  It pains me to say this since I have been an appraiser for a long time.  In my 10 year time horizon until I retire I believe I can build more wealth as a small business owner and have decided to purchase a business.  I would like to personally thank everyone for sharing your experience and advice. Best of luck to you all.

 Good luck however you are 100% incorrect, 

 You're opinion is just as valid as mine.  Whatever works for you.  I'm sure you have investment properties that earn $1,000 net profit per week...

I have no skills. Jumped into this figuring I could learn as I go.  Previous owner set up the FB ads and they have been running for 2 years. FB machine learning automagically optimizes the ads over time which increases the click through rate and lowers the cost per click. Currently making 50% plus on my ad spend. Since there is almost no traffic from Google search there is no "rocky Income".

I'm not paying anyone to do anything. Website is on wordpress which is a free open source platform. Web hosting is about $20/mo and I pay a same fee for the domain name once a year. Almost no costs.

No Adsense. Once you get to 50,000 visitors/month you qualify for better ad networks that pay at a much higher rate. 

Once again, not trying to put down RE as an investment vehicle, but with the inflated housing prices and higher interest rates the math just doesn't work.  Best of luck.

Not too many STRs in Columbus, OH.  There are only so many Buckeye games a year.

Quote from @Chris John:

@Mike K.

I'm super curious as to what owning this website entails.  Can you give a brief rundown of the responsibilities - both short and long term?  Thanks

 I bought a blog website that has been operating for 2 years. It has 350 articles on the same topic. I run facebook ads and people click the ads and go to my website. My responsibilities are to manage the FB ad campaigns. There were a few non-performing ads that I turned off which has increased my profit margin. 

I'm running the same FB ads that the prior owner has been running for the last 2 years. I have not written any new blog posts yet. Heck, I still haven't read all of the existing articles on the website.

I was looking at a cat lovers blog that makes $4,000-$5,000/mo net income from social media traffic. Just couldn't do it because I'm a dog person and I hate cats. 

The nice thing about looking at online businesses is that when you express interest and sign the digital NDA owner gives you a P&L statement going back 24 months. Because it's digital all of the website traffic, income, and expenses are easy to verify during due diligence. I looked at probably about 50 different websites and analyzed their P&L statements and found a few good ones. 

There are several online marketplaces for purchasing digital businesses. Best one I found is Flippa.com. 

Websites sell at a multiple of net profit. If you buy a website and can increase the profit you are instantly increasing the value of the digital property.  The website I bought has over 100,000 visitors/mo and the profit is low for this amount of traffic. I have several strategies I'm gonna try to increase the profit.

I work for a bank that lost $3 billion last year.   I'm worried about the bank going under and losing my job.  Can't say any more than that. Taking on heavy debt with a negative cash flow on the promise of future appreciation doesn't work for me. Trust when I tell you the house of cards is going to collapse. It's not sustainable. The website I purchased has stable income with a large positive cash flow which will help me feed my family and get through what is coming. I apologize if my tone is harsh. I'm really trying to help people expand their thinking beyond only focusing on RE investments.

Quote from @Bruce Woodruff:

Quote from @Mike K.:

 The only ones that have positive cash flow are the realtors...

Sorry, but what a unknowledgable comment. Every investment property, of any type (STR/LTR/MTR/Flips) I've ever owned has had a positive cash flow. The STRs i owned had a similar monthly profit as you are talking about here. The difference is that when I sold them after 2-3 years, they had doubled (or better) in value. Factor that in and you cannot touch the profit that is availble to a RE Investor.

I applaud your success in your new venture, but don't come back on here to rub our noses in it, when you obviuously have little clue what you're talking about. But seriously, best of luck to you, we all have our experiences and opinions..

Just trying to help. I assure with 30+ years as an appraiser I know EXACTLY what I'm talking about. I did a deep analysis on over 100 rental property opportunities. Not one have a positive cash flow over $300/mo in a best case scenario.  Appreciation, tax benefits, blah, blah, blah.  Cash is king.

 The only ones that have positive cash flow are the realtors...

Thought I'd follow up with all you diehard RE investors. I purchased a website and here is my actual revenue so far:

I've gotten about 52,000 visitors to the website in this time period, mostly from Facebook. Revenue is from display ads on the website.  Net Profit will be around $3,500-4000/mo.  Anyone making this amount of positive cashflow on a 1-2 unit residential property?

Cost of the website was $65,000.  Lower cost - higher profits. No deadbeat renters. No physical maintenance or repairs. Prior owner of the website has a verifiable 24 month history of revenue that is pretty consistent. 

Transferring the domain, website, and social media accounts was kind of a pain in the butt, but once it was done there is not much time or effort needed on my part to operate the website. People visit the website and I make money.

Now that I have most of it figured out it will be much easier to find the next one.

Now is a good time to purchase a website.  Many websites were relying on Google search for most of their traffic and lost 70-90% of there traffic when Google updated their algorithm.  Many of these owners don't know how to generate traffic from social media and have lost most of their revenue. With the lower revenue you can purchase the website at a much lower price.

flippa.com is the best website for purchasing websites.

This is my personal experience. Results may vary.

Quote from @Bruce Woodruff:

@Charles Granja Your posts are smart and appreciated. But your by-the-book approach and over-thinking are just not conducive to basic RE investing. IMHO.

Not that I will take them into consideration, but I appreciate your thoughts anyway...... :-)

 I other words, Bruce doesn't believe math has any part in investment analysis. 

Hey Remington, thanks for voting for my post.  Now can you please stop sending me the emails with the negative cash flow RE deals?  Enough already.